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Lewis: Whole Foods CEO concerned about whole economy

As CEOs go, John Mackey at Whole Foods Market Inc. is a pretty good guy.

He works for $1 a year. He doesn't loot his company with excessive perks and bonuses. His flies Southwest Airlines. He wears Patagonia. Forbes has ranked his company on its "Best Places To Work" list for 15 years. His stock has skyrocketed back from the last recession, from about $8 to about $96 a share, proving his critics wrong. And along the way, he's made lasting changes to the way Americans think about food.

So why does he get such a hard time?

"Occasionally somebody asks me a question, and before I can think about it, I just blurt out the truth from my perspective," he told me.

He's apologized several times for calling Obamacare "fascism" in a recent interview with National Public Radio. He conceded he wasn't sensitive to all the connotations of the term. But he's still got some customers calling for boycotts. Some customers are also upset about another remark Mackey made that global warming "isn't necessarily bad."

I don't agree with either of these positions, but let's face it, any government program that forces its citizens to buy something can rhetorically be called fascism. And as for global warming not being so bad, well, at least we won't have to shovel our driveways.

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"I'm not trying to upset people," Mackey said. "If people ask me a question, I try to give an honest answer. One reason people don't trust business people is because they don't think they tell the truth. It's the same reason they don't trust politicians. They are always being spun. Nobody likes to be spun."

Mackey offered me plenty of honest answers before taking the stage at the University of Denver's Daniels College of Business earlier this week. He's out discussing his book: "Conscious Capitalism: Liberating the Heroic Spirit of Business." One of the first steps, he said, is to quit bashing business leaders and capitalism.

"People think corporations are sociopaths, running around, only caring about money," he said. "Business people are routinely portrayed in the mass media as selfish, greedy and exploitative. They dump their toxic chemicals in the rivers.

They bully people. That's how Hollywood sees them."

Business people now commit most of the murders portrayed in the movies and on TV shows, he argued. "If murder occurs--business is going to be behind it. The caricature is some greedy, ruthless businessman."

I reminded Mackey that while he has built an admirable business, the rest of us live in a world where many of our largest companies and financial institutions routinely settle shocking fraud allegations without admitting nor denying guilt. It's a society here high-rollers get profits and taxpayers and shareholders absorb losses. So isn't such animosity predicable?

"We judge business by its worst actors," Mackey said. "Most business is based on voluntary exchange for mutual benefit. And most business people are honest."

Capitalism is not the problem. It's crony capitalism.

"The system is corrupt," Mackey said. "While President Obama is out demagogue-ing business, he's taking major contributions from Goldman Sachs, and from Google, and from all these guys." Mackey said.

"Obama does not believe in free-enterprise capitalism. He believes in crony capitalism. He's happy to do special favors. Look at the Fiscal Cliff bill that just passed. That was so full of pork. Hollywood got paid off. Alternative energy got paid off.

"I'm not picking on Obama," he clarified. "I'm not picking on one party. They are both corrupt. (President) Bush was horrible. ... We have a crony capitalist system."

For all its flaws, capitalism has lifted humanity from the dirt. "Two hundred years ago, 85 percent of people alive lived on less a dollar a day," Mackey said, "90 percent were illiterate. The average lifespan was 30 or less."

The problem, as Mackey sees it, is that capitalism did not develop its own set of ethics as it developed. Instead, it adopted the ethics of Judeo-Christian traditions. And now that society has gone secular, those ideas have been overshadowed with the myopic ethos of self-interest.

"Everybody I've ever met, who is a self-interest maximizer, is not a very likeable person," Mackey said.

Conscious capitalism means including all stakeholders: Employees, suppliers, customers and communities. You take care of employees because they take care of customers. You take care of communities because that's where customers live.

When the customers are happy, businesses flourish and turn sustainable profits for shareholders. It's so much better than the ol' quarter-by-quarter chiseling.

Businesses need only to find their higher purpose, Mackey said. Doctors, for example, get paid well, but their higher purpose is to heal. Wall Street's higher purpose is to wisely allocate capital. But it's lost its way, growing more concerned with running high stakes casinos, Mackey said. "You have to have a purpose other than running a money machine," he said.

Now, here's where I could not help but give Mackey a hard time. Our entire system is a money machine. To keep it from crashing, the Federal Reserve must constantly print dollars and the federal government must constantly overspend them. Many CEOs are not rewarded for sustainable business models, but for how their stock is doing when it's time to cash in their options. Many investors are not in it for the long haul, but the quick flip. In fact, I'd say we are so entrenched in crony capitalism that conscious capitalism sounds a bit like socialism.

So what's a book by an organic grocer going to do?

"You may be right, but I've given it my best shot," Mackey said. "What else can I do? I am an idealist. I would like the world to improve. I see America in decline."

Mackey truly is an idealist. In addition to working for a $1 salary, he has foregone all future bonuses and stock option awards, according to the company's most recent proxy filing. He says he's made plenty from the stock he's accumulated over the years as Whole Food's co-founder.

"I am fabulously wealthy," he said. "I'm not a billionaire as some people in the media proclaim, but I'm a wealthy guy. ... I could go live on an island."

Instead he's thinking about his intellectual legacy, hoping the example he's set can help put a nation back on track.

"Average income is falling," he said. "Americans now are making less money on an inflation-adjusted basis than were 10 years ago. I'm doing what I can to try to reverse it.

"The currency system that we have today is going to crash," he said. "The U.S., Europe and Japan are all basket cases. They are all in deep trouble.

"Every politician wants to kick the can down the road. They just hope it collapses when someone else is in office.

"Fiat money and entitlement cultures are not sustainable. I don't think these things are capable of reforming themselves without a crash."

If not a crash, then decades of high unemployment and slow growth--or even negative growth like we saw last quarter. But Mackey said he thinks an eventual crash is more likely, given current trends.

"You might end up with Hitlers, and things like that, but there's also a chance we could rebuild intelligently.

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